Dense smoke filled the cabin of the submarine in the morning when Commodore Commanding Submarine (COMCOS), Western Command, was carrying out an inspection before it was to be cleared for operational duties, a Navy officer said.

"We immediately activated our emergency firefighting exercise and seven personnel who had inhaled smoke were airlifted to a hospital. Two officials are unaccounted for. They might have been left in the cabin or at some other place as various cabins and compartments are isolated as part of the emergency measures," he said.

The injured has been admitted to the naval hospital INS Ashwini. The submarine was underwater when the incident occurred and was later brought to the surface. As many as 70-odd officers and men were on board at that time. This is the tenth accident involving an Indian Navy warship and the third submarine mishap in the last seven months.

Sindhuratna had recently undergone a refit in Mumbai and was handed over to Navy in December. It was to undergo two exercises, one at harbour and another at sea, before it was to be given operational clearance. It was at 'Task 2 (exercise at sea)' when the mishap occurred.

Sources have attributed the incident to a leakage in the battery compartment.

They said a Board of Inquiry under a senior officer has been ordered to ascertain the reason behind the mishap. Around a month ago, INS Sindhughosh had a close shave when it entered the Mumbai harbour during a low-tide phase and was about to run aground.

INS Sindhurakshak sank in the Mumbai harbour last year, killing all 18 personnel on board. Defence Minister AK Antony has sought a detailed report from the Navy on the issue.

Earlier this month, INS Airavat, an amphibious warfare vessel, ran aground after which the commanding officer was stripped of his command duties.

After the sinking of the INS Sindhurakshak, one of the mishaps involved INS Betwa which was damaged after probably hitting some underwater object. India's leading minesweeper, the INS Konkan that was undergoing repairs in Vizag, caught fire and suffered major damage to its interiors. The Pondicherry-class minesweeper was getting a refit at a dry dock when the incident occurred.

The naval headquarters is concerned over the spate of mishaps in the Western Command and had even summoned Western Naval Commander Vice Admiral Shekhar Sinha on the issue.